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Friday, 04 January 2013 14:54

Jim Seetaram : “Cooperative societies have the potential to face retail malls”

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The Minister for Business, Enterprise Cooperatives, Jangbahadoorsing (Jim) Seetaram, aged 38, is the youngest minister of this Government.
Elected Second Member for Constituency No.10, Montagne Blanche/ Grand River South East, in 2010, he is the holder of a LLM, Masters in International and Commercial Law, from the University of Buckingham and a LLM en ‘Droit Français et Européen’ from the University of Paris, Pantheon – Sorbonne. With the closing of the Year 2012, declared by the United Nations as Year of the Cooperatives, News on Sunday wanted to know of the achievements of cooperatives during the past year and whether new initiatives will be taken to revamp the movement which will be celebrating its 100th anniversary in 2013.

What is the current status of the cooperative movement in Mauritius?
There are presently 945 Cooperative Societies in Mauritius, grouping more than 120,000 people, that is about 10% of the population. They are operating in 30 different sectors with a turnover of Rs 4.2 billion. They account for 40% of small cane planters, 12% of national sugar production, 70% of fresh green vegetables, 75% of onion production, 40% of potato production and 37% of public bus transport. In Rodrigues, we have around 11,000 members grouped in 45 co-operative societies, with a turnover of Rs 137 million.

The year 2012 was proclaimed Year of the Cooperatives by the United Nations. Are you satisfied that the necessary actions have been taken for the setting up and promotion of cooperatives during the year?
That was a unique opportunity, and we grabbed it with both hands. As the Minister of Cooperatives, I have seen to it that we obtain the necessary funds to mark this auspicious event. We have been successful in all these initiatives. My Ministry has organised no less than 86 events since the opening of the year of Cooperatives in January 2012 to its closing in December 2012. These events alone have permitted to sensitise about 11, 275 people.

The first step was a giant sensitisation campaign to instill the values of the cooperative movement in women and youths, as per our Government Programme 2012-2015. That was done with the help of the National Institute for Cooperative Entrepreneurship (NICE), which operates under the aegis of my Ministry. We ensured that in every school and every village we went to, at least one cooperative was formed. After that, we proved to the new cooperators that we would be true to our promises. It was not a question of just enrolling a maximum of them just to inflate figures, but we ensured that they reaped the fruits at the soonest. We organised as many fairs as possible for them without any participation fee. Our flagship event was a 3-day National Cooperative and SME Fair in July.

This annual event was much more spectacular than in any other previous year. 153 Cooperatives and SMEs participated in the said fair which attracted about 12,000 visitors. Besides, 97 monthly Cooperative and SME fairs were organised in 10 regions: Vacoas, Riviѐre du Rempart, Quatre Bornes, Pamplemousses, Triolet, Plaisance, Rose-Hill, Barkly, Mahebourg, Port-Louis and Curepipe.

A sales outlet for the Mauritius Women Entrepreneurs Cooperative Federation (MWECF) Ltd has been set up in a central area in Port Louis. Moreover, we have organised a series of competitions (project write-up, debates etc)…  About Rs 3.5 million of grants were issued to Cooperative Federations. There have even been private initiatives promoting awareness of cooperatives, such as the Omnicane Award, which had a record 360 participants this year. I am fully satisfied that we are gradually restoring the status of cooperatives as a noble, sustainable and relevant business model.

How far cooperators have been successful at facing the challenges with the creation and setting up of retail malls all over the country?
Cooperatives operating in the retail sector have two categories of customers: the general public and their own clientèle. They serve the latter primarily, which means that they already have a guaranteed market. Moreover, cooperative shops may seem small but they have a network thanks to their federation – the Mauritius Consumer Cooperative Federation which acts like a central purchasing unit (centrale d’achat). This allows them to purchase their goods at a cut-rate price. Also, cooperative stores offer a personalised and flexible service.

For instance, if you have only Rs 5 000 but your marketing basket has cost you Rs 5, 200, you won’t need to return the extra item on its stall as you would in a hypermarket, but the shopkeeper would say: “Fine, you’ll pay me the rest next time”. However, cooperative shops do face difficulties as do other small-sized businesses, but they do have the potential to face the retail malls if they further join their efforts and resources.

Do you think that the Mauritian population has understood the need to adhere to the cooperative movement?
Considering the fact that we have at least 50 applications to join the cooperative movement each year, I can safely say that the cooperative movement is gradually making its way into our population. We are specially targeting youths and women, and they seem comfortable with this alternate model of doing business that they are discovering. They are particularly attracted by the possibility of becoming one’s own boss. Moreover, the fact that a cooperative needs at least five members to exist offers a sense of security: the different members can count on each other’s support.

Also, they are at least five to invest in the enterprise and the risks which all businesses have to bear are shared, making the whole process less burdensome. Women who were thought timorous have made it to Manchester in the U.K, where they participated in the world’s largest-ever cooperative exhibition organised by the International Cooperative Alliance through their cooperative federation – Mauritius Women Empowerment Cooperative Federation. Even multinationals do it via merging, overtaking, tie-ups… Through our aggressive sensitisation campaigns, many Mauritians do understand and are adopting this new model.

Why cooperators have not focused their objectives at creating shopping malls rather than creating small outlets?
The cooperative movement is an autonomous one. At the level of my Ministry, we can only encourage them to think big, but the ultimate decision is theirs. For instance, my Ministry has already signed a memorandum of understanding with the Chamber of Commerce and Industry of Reunion Island, with the view of making joint ventures. But it depends on the wish of the members, their vision, their financing capacity and if they have the appropriate business acumen. I feel they are proceeding cautiously forward. For example, the Mauritius Consumer Cooperative Federation converted struggling small shops into Fair Price shops, a concept which works decently, with one Fair Price Shop having no less than a monthly turnover of Rs 2 million. Similarly, many shops are gradually shifting from counter service to self-service. So, I feel that when cooperatives will feel they are ripe for creating immense shopping malls, they will do it.

How far the cooperative movement has been able to make a thrust into the manufacturing sector and small enterprises?
Well, cooperatives are already by definition small enterprises (except if they have a turnover of more than Rs 50 million where they become large enterprises). As such, they benefit from all facilities meant for the Small and Medium Enterprises sector.   Cooperatives are evolving in 30 areas of the economy including the manufacturing sector and have a turnover of Rs 4.2 billion. And this figure will soon rise as cooperatives are encouraged to explore additional avenues like the production of Fair Trade goods in the non-sugar sector as well, which will entail the payment of a premium price.

Do you think that cooperators should get back their cooperative bank? And why?
Actually, there are already cooperative institutions that are performing like mini-banks dealing with substantial amounts of money, namely Credit Unions (CU) and Cooperative Credit Union societies (CCs). Furthermore, we have the Mauritius Post and Cooperative Bank which has a special desk for cooperators. Moreover, certain cooperatives have shares in this bank.

The Development Bank of Mauritius also works a lot with cooperatives. If the latter were to have their own bank, it would require substantial capital and it would need to meet stringent requirements to obtain a banking license, which also has a significant cost. The day the Mauritian cooperative movement is ready to have its bank, I will give it my full support; but until then, I would rather encourage the creation of a Central fund emanating from several CUs and CCs. It will function with the cash surplus generated by these cooperative societies which would be put in this consolidated fund. The main difference would be that contrarily to a bank, it would not serve the general public but only affiliated cooperatives.
Indradev Curpen

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